But the official decree published on Saturday confirmed a Reuters report a day earlier that the bank would give depositors shares worth just 37.5 percent of savings over 100,000 euros. The rest of such holdings might never be paid back.

IT’s just a wealth tax. Not all that different in theory than what we do to earned income here in the states.

gryphon202 on March 30, 2013 at 11:08 AM

Its a big difference in that, theoretically, the money has already been taxed once.

Suppose you earned ordinary income and paid taxes on it, and deposited your after-tax money in a bank account. The government doesn’t come back and tax the after-tax money you placed in your bank account again as income.

My guess is that most Cypriot depositors likely paid income taxes on the money when it was earned also. Now its just being confiscated.

The haircut does make some sense from a workout perspective: a bank deposit really is an unsecured loan to the bank. If the bank goes under, secured creditors generally take priority to unsecured creditors. One would expect unsecured depositors to take some kind of a hit. But then, the bank should end up going bankrupt.

Some folks say that a lot of the large accounts in these banks in Cypress belong to the Russian Mafia (mob), if that is true and they take 40% of their money, they (the Russian Mafia) might get a little pissed. There might be a few EU bankers, EU Politicians and some of their family members (and not just in Cypress) that end up on slabs in morgues that may be difficult to positively identify without DNA tests. Huh, at any rate, good luck with that.

Wallythedog on March 29, 2013 at 11:45 PM

Supposedly a good amount of the Russian money was able to escape the capital controls. Apparently, there were exceptions to the electronic transaction ban, such as for “humanitarian aid,” etc. From what I understand, much of the Russian deposits were able to flee while the banks were closed.

That’s one of the reasons why the haircut taken by uninsured depositors rose so high (remember, it was initially to be about 10%). Now some uninsured depositors will end up taking an effective 80-100% haircut.

]]>By: Wallythedoghttp://hotair.com/greenroom/archives/2013/03/29/cyprus-president-were-not-going-to-leave-the-euro/comment-page-1/#comment-148406
Sat, 30 Mar 2013 03:45:40 +0000http://hotair.com/greenroom/?p=52668#comment-148406Some folks say that a lot of the large accounts in these banks in Cypress belong to the Russian Mafia (mob), if that is true and they take 40% of their money, they (the Russian Mafia) might get a little pissed. There might be a few EU bankers, EU Politicians and some of their family members (and not just in Cypress) that end up on slabs in morgues that may be difficult to positively identify without DNA tests. Huh, at any rate, good luck with that.
]]>By: Nethicushttp://hotair.com/greenroom/archives/2013/03/29/cyprus-president-were-not-going-to-leave-the-euro/comment-page-1/#comment-148398
Sat, 30 Mar 2013 01:16:28 +0000http://hotair.com/greenroom/?p=52668#comment-148398So the EU should just be envisioned wearing a dirty white tank top and Cyprus, sporting a new black eye, is just saying, “But you don’t understand.. I love him!”
]]>By: wte9http://hotair.com/greenroom/archives/2013/03/29/cyprus-president-were-not-going-to-leave-the-euro/comment-page-1/#comment-148396
Sat, 30 Mar 2013 01:14:00 +0000http://hotair.com/greenroom/?p=52668#comment-148396Yeah, but in the prequel they said, “We’re not going to steal 40% of the money in banks.”
]]>By: RadClownhttp://hotair.com/greenroom/archives/2013/03/29/cyprus-president-were-not-going-to-leave-the-euro/comment-page-1/#comment-148382
Fri, 29 Mar 2013 22:50:12 +0000http://hotair.com/greenroom/?p=52668#comment-148382

In no way will we experiment with the future of our country.

Yeah, I guess you should stick with the failed experiment you already have. Might as well go down with the ship.

]]>By: gryphon202http://hotair.com/greenroom/archives/2013/03/29/cyprus-president-were-not-going-to-leave-the-euro/comment-page-1/#comment-148363
Fri, 29 Mar 2013 19:36:56 +0000http://hotair.com/greenroom/?p=52668#comment-148363You couldn’t leave the Euro if you wanted to, dipshit. The only way you’re going to avoid a run on your banks now is to convince the plebes that you don’t want to. Good luck with that.
]]>By: Weight of Gloryhttp://hotair.com/greenroom/archives/2013/03/29/cyprus-president-were-not-going-to-leave-the-euro/comment-page-1/#comment-148358
Fri, 29 Mar 2013 19:19:48 +0000http://hotair.com/greenroom/?p=52668#comment-148358When it becomes serious, you have to lie.

These guys are all socialists who went to the same kinds of schools and learned the same things and have been trained to venerate the EU as some sort of holy wave of the future. They will NEVER give it up until the entire Eurozone implodes. It’s the same problem with US socialists – most are a bunch of fanatics who cannot concieve of why their schemes don’t work.

Doomberg on March 29, 2013 at 1:48 PM

One would think that they’re love of their own country would take precedent over the amorphous EU, especially in a situation like this. I can’t see how the EU survives this level of contagion — the problems from 2008 have been pushed off, not fixed.

I truly do not understand the massive loyalty shown the EU — the first country to leave the Euro (and tear up its EU debt) may well be better off than the others.

Revenant on March 29, 2013 at 12:51 PM

These guys are all socialists who went to the same kinds of schools and learned the same things and have been trained to venerate the EU as some sort of holy wave of the future. They will NEVER give it up until the entire Eurozone implodes. It’s the same problem with US socialists – most are a bunch of fanatics who cannot concieve of why their schemes don’t work.

]]>By: Oil Canhttp://hotair.com/greenroom/archives/2013/03/29/cyprus-president-were-not-going-to-leave-the-euro/comment-page-1/#comment-148341
Fri, 29 Mar 2013 17:19:36 +0000http://hotair.com/greenroom/?p=52668#comment-148341What is an voluntary slave called?
]]>By: Revenanthttp://hotair.com/greenroom/archives/2013/03/29/cyprus-president-were-not-going-to-leave-the-euro/comment-page-1/#comment-148338
Fri, 29 Mar 2013 16:51:49 +0000http://hotair.com/greenroom/?p=52668#comment-148338I truly do not understand the massive loyalty shown the EU — the first country to leave the Euro (and tear up its EU debt) may well be better off than the others.

Just think of the possibilities. You’re Cyprus. You publicly renounce the Euro, switch to a Cypriot currency and default on all the Euro debt. You then re-establish yourself as a non-Euro tax haven, deregulate your economy, and try to become the Cayman islands of Europe and Russia.

Sure, the Euro countries might be pissed off, but what are they going to do? Invade you?

There will be pain in the beginning, but over time, you can increasingly stick your finger in the eye of the other Euro countries, by undermining EU regulation and attracting expats, businesses fleeing high-tax environments, tourism, etc. Your ability to make your own laws constitutes a competitive advantage vis a vis everyone else.